Individual Mandate Upheld as Tax

The Supreme Court has upheld the individual mandate as valid under the Congress’ taxing power in the Constitution. Disappointing, but not surprising.

The worst thing about it is that the individual mandate is really a one-shot delaying tactic. The law can only mandate people into the insurance market once. When health care spending continues to rise after the mandate, insurance premiums are going to have to rise along with it. So, really, the Supreme Court has upheld Congress’ ability to use its taxing power as a punitive measure in the service of a cheap trick.

Two predictions:

1. Health care premiums initially hold flat in 2014 as insurers get more customers via the mandate, then start rising faster than they were before.
2. Congress finds more ways to exercise its taxing power as punishment for non-compliance.

Like this:

The biggest thing I see driving up insurance rates will be a combination of K Street special interests and the insurance companies themselves. Every special interest will want their medical malady to be required to be covered. The insurance industry will be happy to do so in exchange for higher premiums or more subsidies.